Will we be able to bust COMEX this month? I hope so. Keep track of the progress with the charts: scroll down for the latest or click this link for all posts:Vaporize COMEX CountDOWN

Will California be rockin’-n-rollin’ at the end of next week? This site [link] maps global disasters minute-by-minute, from earthquakes to terrorist attacks.

From George Ure’s UrbanSurvival.com site:“We’re now roughly one week from the twin quakes window in Cliff’s predictive linguistics work when the world seems likely, based on language shifts that have preceded similar events in the past, a pair of quakes, as least one of which is linguistically destined to isolate a bunch of people and cause severe socioeconomic impacts including offers of foreign aid.

Here again, ‘life by halves’ features some folks will be ready because of their learning and experience which will allow them to see the possibilities in advance and prepare to meet them on their own terms, while the other side denies that language precedes change and that Cliff & I are just a couple of nutjobs.”

“No dispute about this last point from us, but as we’ve said in the past, ‘Just because we may be nuts doesn’t make us wrong’. Remember when we posted the last ‘big quake’ advisory a couple of days before the China 7.8 – 8.0 quake in May. Off by a day or two in the May 9 and May 10 warnings, but that’s why I call the predictive linguistics project a “rickety time machine”. When it takes a half linguist/ half SQL-guru and 200+ executables in four languages (dos, perl, c, & prolog) to weed though terabytes of data, no, this is not something you’ll be seeing on Amazon any time soon with a slick Vista graphics front-end..”

COMEX gold & silver price manipulations are bashing precious metals investors, miners and shareholders. If COMEX gold and silver inventories become depleted the price fixing will stop and the precious metals will rise to their true levels.

Inventory levels are expressed in millions of ounces: For example: gold hovers around 3 million oz; silver at 70 million oz.

Will Increased Delivery Demand Bust the Gold Warehouses?Jim Sinclair: “I have been speaking with many people this evening who have taken gold delivery. What I am hearing is not impressive. When examined closely it is a paper system that may have fallen badly behind as gold moved ahead since 2001. There is a possibility the system is antiquated and more FUBAR than anyone, even the warehouses themselves, realize.” COMEX Warehouses in Trouble?

Will the Manipulation of Gold & Silver Prices Ever End?Gold and silver price suppression has been going on for years now, as documented by GATA and Ted Butler. Who’s behind it? Evidence points to JPMorgan Chase using massive (and illegal) short-selling on COMEX, at the bidding of the president’s Plunge Protection Team. Now, Jim Sinclair answers the question on everyone’s mind: Will the COMEX Manipulation Ever End?

Crush COMEX Like a Ripe Melon?A perceptive reader, Mike, is puzzled by all this talk about busting COMEX. Why hasn’t it happened yet? Does the fact that it hasn’t happened yet mean it’s likely it’ll never happen? Are we silver bugs simply doomed to suffer? Reader Asks, “What’s So Hard About Busting COMEX?”.

COMEX Not Vaporized But, Maybe, Smoldering?COMEX silver inventory didn’t vaporize last December, but it was knocked down a bit. Now Ted Butler is saying “we may be heading into a wholesale silver shortage.” I wonder Is COMEX Cracking? Finally?

Get Physical: Another Knock Against ETFsDavid Morgan reports Barclays has changed SLV prospectus wording from “Silver Bullion” to just “Silver.” Does this sound like not all their silver is bullion? If it ain’t physical silver, what is it? Silver ETF Isn’t 100% Real

Here’s the most concise explanation I’ve ever read on how Central Banks (the Federal Reserve in the US) have made this huge world-wide economic mess. From Alf Field:

Briefly, the fractional reserve system requires approximately 10% of new deposits to be lodged with the Federal Reserve or Central Bank.

Thus if a new deposit of say $1.0 million of fresh money arrives in the banking system, the bank receiving the deposit must put $100,000 with the central bank and can loan the balance of $900,000. When that loan arrives as a deposit with another bank, $90,000 must be placed with the central bank and $810,000 can be loaned out. That in turn will arrive as a deposit elsewhere and $81,000 must be placed with the central bank and $729,000 can be loaned out, and so on. Finally when all these iterations are complete, the central bank ends up with $1.0 million as deposits from the banks that have made loans of about $9.0 million.

At this point new loans can only be made from profits generated within the economy. This is important as the banking system will have reached a period of stability which will remain until a fresh deposit of newly created money appears in the system from somewhere. That new money will allow the banking system to generate loans of approximately 9 times the amount of new money.

What happens if there is a money tap open somewhere in the system and each day a large dollop of newly created money enters the system? Very soon the banks will be awash with deposits and desperately seeking new secure loans.

As lions kill instinctively in order to survive, bankers make loans instinctively in order to survive. Eventually in these circumstances of excess deposits, lending standards deteriorate and new loans are made to less credit worthy borrowers. In time, anyone with a good story gets a loan.

It is this desperate search for secure new loans by the banking systems of the world that is the primary cancer referred to earlier in the medical analogy. It allowed Wall Street to develop racy new products which were gobbled up by banks around the world in the belief that they were secure investments.

This is what actually happened in the real world. There was an open tap pouring large dollops of newly created money into the world banking systems over many years that created the insatiable appetite for new banking loans and investments.

What is important to understand is that without this insatiable demand for secure loans and investment by banks, it would not have been possible for all the other irregularities to have taken place. Credit standards would have remained robust and the banks would have avoided the bulk of the toxic waste that they got involved with.

What was the money tap that was left running? It is a flaw in the international monetary system which allows the USA to pay for its trade deficit using newly created US Dollars. This has been going on for two decades but has mushroomed in recent years.

Ten years ago, the US trade deficit was of the order of $100 billion per annum. This number grew steadily until a couple of years ago it was running at $800 billion per annum. An injection of $800 billion into the world’s banking system could accommodate new loans of nine times that amount, or $7.2 trillion in a single year!

Recently the US trade deficit has been averaging $700 billion per annum, allowing new loans of the order of $6.3 trillion per annum to possibly be created. These numbers are in addition to other sources of new money which individual countries injected into their local monetary systems to stimulate their economies.

The simple fact is that the world’s banks were awash with deposits looking for anything that resembled a reasonable loan or investment. Wall Street created the products required to meet that demand, resulting in the huge debt bubble that recently came to an end. In addition, banks (prompted by the large availability of new deposits) made many unwise loans across national borders which are now creating problems in countries in Eastern Europe and South America.

Dr. Martin Weiss is founder of Weiss Research and someone I listen carefully to on financial matters. (He founded the bank rating company, subsequently sold to Jim Cramer’s company TheStreet.com.)

Monday he wrote a special piece for his subscribers. Here are some highlights:

CITIGROUP COLLAPSES! BANKING SHUTDOWN POSSIBLEIt pains me deeply to announce that, despite the massive government rescue, yesterday’s collapse of Citigroup could ultimately lead to a shutdown of the global banking system.

For many years, I hoped this would never happen, and I thought we might be able to avoid it.

And now, here we are, nearing the end of the road with the largest banks of all endangered and with no larger bank that can swallow them up. It’s a day of reckoning that leaves me no choice but to issue this three-part warning:

* Despite the U.S. government’s massive Citigroup bailout, it is going to be difficult for the global banking system to survive the shock to confidence for very long.
* Even if insured depositors do not pull out their funds, uninsured institutional investors are likely to run with their money, threatening to bring the system down.
* And alas, even if you have your money in a safe bank with full FDIC coverage, you could be adversely impacted.

How will the events unfold?

Banking Meltdown – Is it Possible?On October 11, 2008, a single statement hit the international wire services that provides more specific clues:

“Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown.”

This statement was not the random rant of a gloom-and-doomer on the fringe of society. Nor was it excerpted from a twentieth century history book about the Great Depression. It was the serious, objective assessment announced at a Washington, D.C. press conference by the Managing Director of the International Monetary Fund (IMF).

The unmistakable implication: So many of the world’s largest banks were so close to bankruptcy, the entire banking system was vulnerable to a massive collapse.

Is a bank holiday really possible? Most observers think not. “If deposits are insured,” they ask, “why would anyone want to pull them out?” The reason: Most bank runs are not caused by insured depositors. They’re caused by the exodus of large, uninsured institutions who are usually the first to run for cover at the earliest hint of trouble. That’s the main reason Washington Mutual, America’s largest savings and loan, lost over $16 billion in deposits in its final eight days in 2008. That’s also a major reason Wachovia Bank was forced to agree to a shotgun merger soon thereafter.

How Long Would a Global Banking Shutdown Last?No one can say with certainty. But based on other banking holidays in modern history, it’s safe to conclude that it could last for quite some time and cause severe hardship for hundreds of millions of savers around the world.

The first and most obvious hardship is that you could be denied immediate access to most or all of your money for an indefinite period. What about government agency guarantees like FDIC insurance? A large proportion of those guarantees, unfortunately, would have to be suspended in order to give banking regulators the time they need to sort out the mess.

It is simply not reasonable to expect that governments will have the resources to immediately meet the demands of thousands of institutions and millions of individuals if they all want their money back at roughly the same time.

“Your money is still safely guaranteed,” banking officials will declare. “You just can’t have it now.”

The second and more long-lasting hardship is the possibility that, by the time you do regain access to your money, you will suffer losses. In this scenario, the government would likely create a rehabilitation program for the nation’s weakest banks, giving depositors two choices:

* Opt in to the program by leaving your funds on deposit at your bank for an extended period of time, earning below-market interest rates. The bank is then allowed to use the extra interest to recoup its losses over time — income that, by rights, should have been yours.
* Opt out of the program and withdraw your funds immediately, accepting a loss that approximately corresponds to the actual losses in the bank’s investment and loan portfolio.

Needless to say, neither the opt in nor the opt out choice is a good one:

If you opt in, you take the chance that the government’s rehab program may not work on the first attempt and that it will be replaced by another, even tougher program in the future. Moreover, even if it works out as planned, you will suffer a continuing loss of income and access to your cash over an extended period of time.

If you opt out, instead of lost income, you suffer an immediate loss of principal. Moreover, in order to discourage savers from opting out, the government would typically structure the program so that everyone demanding immediate reimbursement suffers an additional penalty.

To avoid all of these risks, I recommend seriously considering moving (a) nearly all of your bank deposits and accounts, plus (b) a modest portion of the money you currently have invested in securities to the safest and most liquid place for your money in the modern world:

Short-Term U.S. Treasury Securities
True safety has two elements. The first is capital conservation — no losses, no reduction in your principal. But it’s the second element that most people miss: Liquidity — the ability to get a hold of your money and actually use it whenever you want to, without waiting, penalties, bottlenecks, shutdowns or disasters of any kind standing in your way.

You might also ask: “Isn’t the United States government also having its own share of financial difficulties with huge budget deficits? If those difficulties could get a lot worse, why should I trust the government any more than I trust other investments? Why should I loan my money to Uncle Sam?”

The United States is the world’s largest economy, with the most active financial markets and the strongest military in the world. Despite Uncle Sam’s financial difficulties, this has never been in doubt; and even in a financial crisis, that’s unlikely to change because the crisis is global. So its immediate impact on the finances of other governments is likely to be at least as severe.

More importantly, the United States government’s borrowing power — its ability to continue tapping the open market for cash — is, by far, it’s most precious asset, more valuable than the White House and all public properties; even more valuable than all the gold in Fort Knox. Those assets are like Uncle Sam’s home, land and pocket change. His borrowing power, in contrast, is like the air he breathes to stay alive.

Remember: The U.S. Treasury Department is directly responsible for feeding money to the utmost, mission-critical operations of this country, including defense, homeland security, and emergency response. The Treasury will do whatever it takes to continue providing that funding, and that means making sure they never default on their maturing Treasury securities.

Even in the 1930s, when a record number of Americans were unemployed, and when we had a head-spinning wave of bank failures, owners of Treasury bills never lost a penny.

Even in the Civil War, Treasuries were safe. Investors financed 65 percent of the Union’s war costs by buying Treasury securities. But the war was far worse than those investors had anticipated, leaving over half of the entire economy in shambles, raising serious concerns among those investors. However, the U.S. government made the repayment of its maturing Treasuries it’s number one priority over all other wartime obligations. Investors got back every single penny, and more.

My main point is this: The crisis ahead will not be nearly as severe as the war that tore our nation apart. If Treasury securities were safe then, we have no reason to doubt they will be safe today. Unfortunately, however, I cannot say the same for all of the money you’ve entrusted to a bank.

Question: “Suppose there’s a bank holiday and I need to cash in my Treasury bills. Since the Treasury Department and the Treasury-only money market funds use banks for transfers, won’t I be locked out of my money too?”

We actually have a real precedent for a similar situation. In Rhode Island in 1991, when the governor declared a state-wide bank holiday, all the state-chartered savings banks were closed down. Every single citizen with money in one of those banks was locked out.

At the time, one of our Safe Money Report subscribers happened to have a checking account in one of the closed Rhode Island banks. Thankfully, he had almost all of his money at the Treasury Department in Treasury bills, so his money was safe. But he called and asked: “The Treasury is set to wire the money straight into my bank account, which is frozen. Will the money the Treasury wires me get frozen too?”

In response, I told him to check his post office mailbox. Instead of wiring his funds, the Treasury had taken the extraordinary measure of cutting hard checks and mailing them out immediately. They wanted to make absolutely sure he got his money without any delay.

The moral of this story is that, even in a worst-case banking scenario, the Treasury will do whatever is necessary to get your money. We can’t forecast exactly how. But they will probably send you hard Treasury checks. And they’ll probably designate special bank offices in every city in every state where you can cash them in. Ditto for Treasury-only money market funds. [more]

Note from Scott: I disagree with Dr. Weiss on the safety of US Treasuries. I believe that, within as little as two to six months we will see the US government default (go bankrupt). This is unthinkable to virtually everyone with any extensive financial background. Nonetheless, I think it will happen. Will US Treasuries be safe?

I don’t know.

If the US dollar is suddenly replaced by the Amero (as forecast by George Green in Dollar Death Warning) how will Treasuries be affected?

I dunno.

I do know physical gold and silver are stores of real wealth, and have been since Jesus was a toddler. US Treasuries are still just a “promise to pay.”

Please do what you think is in the best interests of you and your family. Please be safe.

***Today, Nov 28, is first notice day for taking delivery of December COMEX gold and silver. The clock is ticking to bust COMEX and free gold & silver prices.

This just in from Jim Willie, editor of the Hat Trick Letter:

Powerful foreign entities are preparing a massive major assault on the US financial corruption, at key spots. All signs seem to point to the gold futures contracts traded at the COMEX and NYMEX, whose prices are routinely suppressed by a high volume of uneconomic short contracts by two to four banks.

A highly leveraged sequence is soon to be unleashed, one that should bring back thoughts of asymmetric attack. Think small cost of a weapon, heavy damage to costly equipment. Something big comes to the gold market, with big angry players! If successful, severe damage will be done to the USDollar. Their goal is to kill the COMEX gold market, the key location for gold price suppression. Major Russian, Chinese, Arab, and European bankers and billionaires are angry beyond words. The giant portion of gold vaulted resides in Central Europe. A plan is in place.

The key here and now is COMEX gold futures contracts, where many big players are demanding delivery for their December contracts. North American investment houses have also targeting them for delivery demands. With newly energized Russia & China building their gold treasures, with Arabs turning from distrusted Western paper and more toward gold & silver, look for the new players to offer support to the primary thrust attacks. If successful, it will be a defining moment in US financial history. The first delivery notice for the December gold contract is given on November 28.

Recall that Russians and Arabs each have severe damage done to the crude oil price and petro revenues. The futures contract games conducted by US price systems and Wall Street tactics used against hedge funds are largely responsible. Russians and Arabs are angry. Their financial markets are in turmoil, their economies are disrupted, their property markets are in disarray. Furthermore, Russians and Arabs own a large amount of acquired gold, whose value is also pushed down by corrupt US paper mechanisms. The Persian Gulf lusts to put in place a gold trading center of world repute.

A brutal powerful trap has been set, to be executed upon the paper engineers without mercy. If you have noticed the facial expression on some Wall Street heads, like Paulson, change in the last few weeks, this is one reason why. They have no shame in confiscation of Congressional funds. But they dread presiding over a failed pricing system for gold, and dread the prospect of being unmasked, not to mention bankrupted. Keep the focus on the JPMorgan garbage can, where the illegal futures contracts are stored, the very same contracts that are never marked to market on their balance sheet. A COMEX blowup reveals their grotesque distortion of market forces, underpinned by gold and USTreasurys. More details are provided in the November Hat Trick Letter report, like the movement by the Chinese and Iranians to vastly increase their gold reserves. [more]

To my former employees: remember back in 2005 when I told you of my strategy to “beat the gov’t at their own game” when serious inflation would hit? I said we would be looking at rampant inflation in the future and the best protection looked like owning physical gold and, especially, silver?

Remember I said I planned on paying off my house with the silver once inflation and demand ran its price to the moon?

Good, you’re with me. I know some of you adopted the plan. It’s what I still intend to do.

However, I just read an interesting contrary opinion from someone whom I respect: George Ure at www.Peoplenomics.com . Even though he thinks the idea is “obviously nonsense” I thought you might like to hear a divergent view.

“So should we take money out of our 401(k) and pay off our house?” asks one reader?

I don’t know the specifics of this person’s economic situation, but the answer is simple. Build a spreadsheet and put all the variables in: Likely return on the 401(k) given a wide range of expectations (including going to zero) and then paying off the mortgage so you can have a free & clear place to live. Almost, that is, because government is always your silent partner via the confiscatory tax system.

“But that’s so complicated” came the answer after I explained about setting up the model to take into account paying off the house with ‘cheaper dollars’ once inflation kicks in (and I can think of 7.4 trillion reasons it might, along with a dollar repudiation that stubbornly appears in Cliff’s work.)

One way to get to the answer is to reduce everything to how many hours of work you’ll have to do to pay off the house. After all, time spent in this life is the ultimate currency, right? The goal here is to get as much self-reliance as possible and my 2¢ is that if you’re going to pay your house off, the sooner you stop paying the debt monster, the better off you’ll be.

If you bought a $60,000 house in 1980, inflation alone would bring the house value to $158,990 says the Minneapolis Fed inflation calculator. And, depending on your interest rates, you would pay about $180,000 for it.

If the average income over this period started from $10, you should now be making $26.17 per hour just to stay even with inflation. Call it an average of $18.085 per hour.

If you had paid the house off when you bought it, you would have worked 6,000 hours to buy the house (not counting taxes, of course). Given that most folks work 2,000 hours per year, then you’d put about three years labor into buying the house.

On the other hand, with an average of $18.085 per hour and principal plus interest of $180,000 (varies by interest rate, which I assume to be fixed), then you would work for 9,952 hours to pay off the house, or just under 5-years. Longer, actually, because of indexing of taxes which would be forcing you into higher and higher brackets.

Not saying this will be the case in the future, but a reader wanted to know, so that’s how I look at damn near everything economic: What gives me the most bang for the most buck? “Oh don’t worry about the payments because you’ll just be paying the loan back with cheaper dollars..” is obviously nonsense, especially with the National Layoff Festival about to be sprung on us.

So, if you paid off your house with three years worth of labor in 1983, you would have 25-years of no house payment – just taxes. yeah, no mortgage write off’ but counterbalancing that is the delicious ability to say ‘Take this job and shove it” any time you wanted, because you weren’t locked in to a house payment.

In the end, debt is a yoke of financial oppression which the ruling class seems to wield effectively to keep themselves living off the efforts of others. Think of it this way: The difference between the 6,000 hours to buy a house cash and 9,952 hours bought on credit didn’t ‘disappear’. It went someplace. And that place is into the ruling elite’s pocket.